A.P. Pharma Reports First Quarter Results; Clinical Program for APF112 Initiated in 2002; Royalty Income Up 39% Over First Quarter 2001.Business Editors & Health/Medical Writers REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif.--(BW HealthWire)--May 7, 2002 A.P. Pharma, Inc. (Nasdaq:APPA), a specialty pharmaceutical company, today reported financial results for the three months ended March 31, 2002, reflecting increased royalty income as well as increased research and development expense as the company entered Phase I clinical trials Noun 1. phase I clinical trial - a clinical trial on a few persons to determine the safety of a new drug or invasive medical device; for drugs, dosage or toxicity limits should be obtained phase I . Current Highlights: -- Clinical development of post-surgical pain product, APF112, initiated in first quarter 2002; efficacy studies anticipated to start in second half of 2002. -- Preclinical safety and toxicology studies initiated for second Biochronomer(TM) product candidate, targeting inflammation. -- Multiple financially-reimbursed feasibility studies involving the Biochronomer system underway. -- New focus on ophthalmic applications for Biochronomer systems attracting corporate collaborators. -- Royalty income increased by 39% over first quarter 2001; significant increases for both Carac(TM) and Retin-A Micro(R). -- Direct-to-consumer advertising campaign by Ortho Neutrogena for Retin-A Micro continues in 2002; market share increased over first quarter 2001. -- Approximately $18 million in cash at quarter-end. In first quarter 2002, A.P. Pharma commenced its Phase I clinical program for APF APF, n the abbreviation for acidulated phosphate fluoride. 112, its lead product candidate for the treatment of post-surgical pain following procedures such as open or arthroscopic knee surgery Arthroscopic knee surgery Surgery performed to examine or repair tissues inside the knee joint through a special scope (arthroscope). Mentioned in: Chondromalacia Patellae arthroscopic knee surgery . Using the company's Biochronomer bioerodible drug delivery system, APF112 is designed to provide 24-36 hours of post-surgical pain relief and to minimize the use of morphine-like drugs (opioids Opioids One of the major classes of semi or fully synthetic psycho-active drugs that includes methadone. Mentioned in: Cancer Therapy, Palliative, Methadone opioid ) which are used extensively in post-surgical pain management. Opioids are associated with a wide range of side effects Side effects Effects of a proposed project on other parts of the firm. , such as nausea, sedation Sedation Definition Sedation is the act of calming by administration of a sedative. A sedative is a medication that commonly induces the nervous system to calm. Purpose The process of sedation has two primary intentions. , dizziness dizziness: see vertigo. , constipation constipation, infrequent or difficult passage of feces. Constipation may be caused by the lack of adequate roughage or fluid in the diet, prolonged physical inactivity, certain drugs, or emotional disturbance. , vomiting vomiting, ejection of food and other matter from the stomach through the mouth, often preceded by nausea. The process is initiated by stimulation of the vomiting center of the brain by nerve impulses from the gastrointestinal tract or other part of the body. , urinary retention Urinary retention The result of progressive obstruction of the urethra by an enlarging prostate, causing urine to remain in the bladder even after urination. , and in some situations, life-threatening respiratory depression. APF112 incorporates mepivacaine, a local anesthetic local anesthetic n. An agent that, when applied directly to mucous membranes or when injected about the nerves, produces loss of sensation by inhibiting nerve excitation or conduction. with analgesic analgesic (ăn'əljē`zĭk), any of a diverse group of drugs used to relieve pain. Analgesic drugs include the nonsteroidal anti-inflammatory drugs (NSAIDs) such as the salicylates, narcotic drugs such as morphine, and synthetic drugs properties, which has been used extensively in clinical practice for several years for short-term pain relief. In animal studies, APF112 has demonstrated prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. analgesic effect. In addition, A.P. Pharma has identified a second Biochronomer product candidate which will incorporate meloxicam, the well-characterized anti-inflammatory agent, to prolong its therapeutic effect over approximately a one-month period for orthopedic applications. A.P. Pharma has also initiated several feasibility studies The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. for other Biochronomer product applications, including ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for , restenosis restenosis /re·ste·no·sis/ (re?ste-no´sis) recurrent stenosis, especially of a cardiac valve after surgical correction of the primary condition.restenot´ic re·ste·no·sis n. , fertility, osteoporosis osteoporosis (ŏs'tēō'pərō`sĭs), disorder in which the normal replenishment of old bone tissue is severely disrupted, resulting in weakened bones and increased risk of fracture; osteopenia and immune stimulation. The Company's collaborators range from Fortune 500 pharmaceutical companies to biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. . Some have multiple projects with A.P. Pharma. First Quarter Financial Results The Company reported total revenues for the first quarter of 2002 of $1,238,000, compared with $971,000 for the first quarter of 2001. The increase in revenue was primarily attributable to a 39% increase in royalties, on sales of Retin-A Micro(R), marketed by Johnson & Johnson, and Carac, marketed by Dermik Laboratories, an Aventis company. Total revenues also included initial research and development fees from two of the Company's collaborators for work underway on feasibility studies. Research and development expense for the first quarter of 2002 was $1,497,000, compared with $1,378,000 for the first quarter of 2001, due mainly to the initiation of Phase I clinical studies for the Company's first product candidate, APF112, for the treatment of post-surgical pain, and other new product development activities. The net loss for the first quarter of 2002 was $1,006,000 or $0.05 per share, compared with a net loss for the first quarter of 2001 of $1,121,000 or $0.06 per share. Conference Call Information A.P. Pharma will host a conference call to discuss first quarter results today, beginning at 11:00 a.m. ET (8:00 a.m. PT). To participate in the live call via telephone, please call (888) 803-8275. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (800) 642-1687, and entering reservation number 3987710. The conference call will be broadcast live over the Internet at www.appharma.com. A replay will be available on the Company's Website for 14 days. About the Biochronomer System The Biochronomer system is a unique and versatile family of injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. and implantable drug delivery systems specifically designed to provide delivery of drugs over periods from hours to months. The first generation of this family has been designed for the short-term release of pharmacologically phar·ma·col·o·gy n. 1. The science of drugs, including their composition, uses, and effects. 2. The characteristics or properties of a drug, especially those that make it medically effective. active compounds for periods up to one month. This generation of polymers has been the focus of the Company for the development of its products and is incorporated as an injectable gel in the Company's APF112. About A.P. Pharma A.P. Pharma is a specialty pharmaceutical company focused on the development of ethical (prescription) pharmaceuticals utilizing its proprietary polymer-based drug delivery systems. The Company's primary focus is the development and commercialization of its bioerodible injectable and implantable systems under the trade name Biochronomer(TM). Initial targeted areas of application for the Company's drug delivery technology include pain management, inflammation, oncology and ophthalmology applications. The Company's product development programs are funded by royalties from topical products currently marketed by pharmaceutical partners and by proceeds from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of its cosmeceutical cos·me·ceu·ti·cal n. A cosmetic that has or is purported to have medicinal properties. product lines as well as fees it receives from collaborative partners. For further information visit the Company's Web site at www.appharma.com. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for historical information, this news release contains certain forward-looking statements that involve risks and uncertainties, including among others, uncertainty associated with timely development, approval, launch and acceptance of new products, establishment of new corporate alliances and progress in research and development programs. Other risks and uncertainties associated with the Company's business and prospects are identified in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to revise these forward-looking statements to reflect events or circumstances occurring in the future.
A.P. PHARMA, INC.
Income Statement Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, March 31,
2002 2001
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Royalties $ 904 $ 650
Contract Revenues 48 25
Product Revenues 286 296
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Total Revenues 1,238 971
Cost of Product Sales 114 93
Operating Expenses:
Research & Development 1,497 1,378
Selling, General & Administrative 837 813
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Total Operating Expenses 2,334 2,191
Operating Loss (1,210) (1,313)
Interest and Other, Net 204 350
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Loss from Continuing Operations (1,006) (963)
Loss from Discontinued Operations -- (158)
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Net Loss $(1,006) $(1,121)
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Basic and Diluted Loss Per Share:
Loss from Continuing Operations (0.05) (0.05)
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Net Loss (0.05) (0.06)
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Shares used in Calculating Loss Per
Share:
Basic and Diluted 20,360 20,220
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A.P. PHARMA, INC.
Balance Sheet Highlights
(in thousands)
(Unaudited)
March 31, December 31,
2002 2001(a)
------------ ------------
Assets
Cash, Cash Equivalents and
Marketable Securities $18,040 $19,494
Accounts Receivable, Net 1,470 1,468
Other Current Assets 403 662
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Total Current Assets 19,913 21,624
Property, Plant & Equipment, Net 1,570 1,668
Other Non-Current Assets 209 215
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Total Assets $21,692 $23,507
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Liabilities and Shareholders'
Equity
Current Liabilities $2,800 $3,550
Long-Term Deferred Revenues 785 785
Shareholders' Equity 18,107 19,172
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Total Liabilities and Shareholders'
Equity $21,692 $23,507
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(a) Information derived from audited financial statements.
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